William Pomeranz, an attorney with ReedSmith, has tackled the question of federal legislation around offshoring (though he misguidedly uses the term “outsourcing” throughout). “United States: A Legislative Status Report on Outsourcing” covers two areas in particular: current federal laws and regulations and proposed legislation.
As he points out in his concise write-up, there are few limitations on offshoring of work, because the US has international trade commitments it is bound by. The primary restraints are imposed through “privacy legislation,” such as the Gramm-Leach-Bliley and HIPAA, which involve the disclosure of personal data. Another restriction, the Thomas-Voinovich Amendment, states that any function of an executive agency “converted to contractor performance…may not be performed by a contractor at a location outside the [US] except” where it was previously performed outside the US. This only applied to job competitions conducted using 2004 appropriations, though there’s pending legislation to make it permanent.
In the realm of proposed legislation, Pomeranz doesn’t foresee implementation anytime soon because the bills would need to be reconciled with other US international trade commitments.
That said, he lists four bills currently pending:
- HR 828, The Commission on American Jobs, would collect data on “outsourcing by ‘companies of interest,’ including the number of jobs outsourced, the dates…they were transferred offshore, and the location of outsourced jobs.”
- HR 829, Federal Funding Prohibition, “would prohibit a federal agency from awarding a grant or contract, making a loan guarantee or providing any other funding to a ‘company of interest’ that has outsourced any jobs during the previous five years.” The decision could be reversed if that company “agreed to create new jobs equal to 50 percent of the jobs that it outsourced over the previous five years.”
- S1185 and HR 3406, The US Workers Protection Act of 2005, propose that an executive agency function contracted out to a private contractor can’t be performed outside the US except to the extent that it already was.
- S810, Safeguarding Americans from Exporting Identification Data Act (SAFE-ID Act), prohibits companies from disclosing personal information about US residents to any entity outside the US unless it provides notice to the individual, the individual has a chance to object, and the individual is told how to opt out of the disclosure. HR 1653, the House version of this Act differs in that it allows for the transfer of data outside the US as long as the individual had prior notice and the data was being sent to a country with “adequate privacy protection,” as certified by the Federal Trade Commission. If the country hasn’t been certified, the individual must agree to the transfer beforehand.
